Free Guide — MHP Owners
7 Tax Mistakes Mobile Home Park Owners Make (And How to Fix Them)
Many park owners are overpaying on taxes every year — not because they’re doing anything wrong, but because their CPA has never worked an MHP-specific return. Here are the seven mistakes we see most often.
- ✓ Discover the depreciation classification error that most MHP CPAs make — and how to correct it without amended returns
- ✓ Learn which bookkeeping habits are silently understating your NOI and what lenders and buyers actually need to see
- ✓ Understand the exit planning window most operators miss — and why calling your CPA after the LOI is too late
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What’s Inside
Seven Mistakes — One Per Section. Each With a Fix.
Mistake 1: Depreciating POHs Over 27.5 Years
Park-owned homes are 5-year personal property under MACRS — not residential rental property. This single error understates depreciation every year of your hold.
Mistake 2: Not Separating Land Improvements
Roads, utilities, and fencing are 15-year land improvements — not land and not 39-year buildings. If they’re on the wrong schedule, they’re either not depreciating or depreciating too slowly.
Mistake 3: Never Commissioning a Cost Segregation Study
The engineering study that correctly identifies all short-life assets and supports the bonus depreciation calculation. Without it, your depreciation position is incomplete.
Mistake 4: Mixing Lot Rent and POH Rent
These are different income streams with different expense structures, depreciation implications, and lender underwriting treatment. Blending them obscures everything that matters.
Mistake 5: Missing Passive Activity Nuances
MHP passive activity rules interact differently than standard rental real estate — especially when you have POH operations. The default assumptions most CPAs apply are often wrong.
Mistake 6: No Exit Planning Until After the LOI
The most impactful exit tax strategies — cost segregation, entity cleanup, 1031 preparation — require years of lead time. A CPA brought in after the letter of intent is doing damage control, not planning.
Mistake 7: Wrong Entity Structure
Entity structure determines SE tax exposure, depreciation allocation flexibility, exit efficiency, and liability isolation between parks. Most MHP owners outgrow their original structure without realizing it.
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This guide is for informational purposes only and does not constitute tax, legal, or financial advice. The MHP Accountant recommends consulting a qualified CPA for advice specific to your situation.